Updated from 6:00 p.m. to clarify JPMorgan's indemnification of Washington Mutual liabilities
NEW YORK (TheStreet) -- JPMorgan (JPM) won't have to admit wrongdoing in a $5.1 billion settlement with the Federal Housing Finance Authority announced that resolves claims of alleged violations of federal and state securities laws in connection with the bank's sale of private-label, residential mortgage-backed securities to Fannie Mae (FNMA) and Freddie Mac (FMCC).
JPMorgan also agreed not to seek indemnification from the Federal Deposit Insurance Corporation in its corporate capacity for any liabilities associated with the bank's September 25, 2008 purchase of Washington Mutual.
Friday's settlement, however, doesn't pertain to the FDIC's receivership of WaMu. JPMorgan and the FDIC have butted heads on whether the bank assumed WaMu's legal liabilities when acquiring the firm out of receivership during the depths of the 2008 financial crisis.
"Neither JPMorgan Chase Bank, N.A. nor any other JPMorgan Defendant or Future JPMorgan Party shall seek indemnification, contribution, or recovery of any of the amounts paid pursuant to this Agreement from the FDIC in its corporate capacity," the settlement states.
Acting FHFA director Edward Demarco still sees the agreements, announced Friday, as "a satisfactory resolution," that provides "greater certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers."
JPMorgan will pay approximately $2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae to resolve claims tied to mortgage securities the bank and its acquired subsidiaries, Bear Stearns and Washington Mutual, sold to housing finance authorities between 2005 and 2007.